Optimal Bus Subsidy and Cross Subsidy with a Logit Choice Model

Abstract

This paper investigates the impact on bus subsidy analysis of using a probabilistic (logit) choice model predicting random and planned user behaviour. The paper addresses the question of the conventional negative relationship between optimal unit subsidy and route patronage. The paper shows that this result continues to hold under a logit model There can also be rapid increases in total subsidy for small increases in patronage.

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